Dubai Kitchens Company Makes a Household Appliance with Model Number

Dubai Kitchens Company makes a household appliance with model number X500. The goal for 2015 is to reduce direct materials usage per unit. No defective units are currently produced. Manufacturing conversion costs depend on production capacity defined in terms of X500 units that can be produced. The industry market size for appliances increased 10% from 2014 to 2015. The following additional data are available for 2014 and 2015:
Which strategy is Dubai Kitchen's Corporation pursuing?

A) Product differentiation, because total conversion costs decreased.
B) Cost leadership, because the selling price decreased.
C) Cost leadership, because direct material costs per square foot increased.
D) Product differentiation, because the units produced and sold increased.